Discoverability a Rule of Construction for Limitations

• Author: Omar Ha-Redeye
• Date: November 10, 2019

Limitations in personal injury litigation can be contentious, especially since the nature of the damages suffered by a plaintiff may not necessarily be known at the initial time of loss. This is especially true in claims that include chronic pain, as these types of medical conditions are not diagnosed until several weeks after an injury.

In these contexts, a plaintiff may rely on discoverability to exceed the two year presumptive limitation found in s. 4 of the Limitations Act. Courts have extended this notion of discoverability even further, the Ontario Divisional Court finding in Pereira v. Contardo that the two year limitation did not begin until an expert report diagnosing a permanent chronic pain condition was obtained,

[55] As Justice Allen notes, s. 5(2) of the Limitations Act extends the time for the triggering of the limitation period until the point at which the party making the claim objectively discovers they have a cause of action. In the context of motor vehicle accident claims, the analysis of when a claim ought to be discovered is significantly complicated by the factor that the requisite knowledge includes knowledge that the cause of action satisfies a statutory threshold of seriousness imposed by the Insurance Act. Peixeiro v. Haberman, 1997 CanLII 325 (SCC), [1997] 3 S.C.R. 549 establishes that there is no cause of action until the injury meets a statutory threshold of seriousness. In Peixeiro at para. 30, the Court stated that the cause of action does not exist until sufficient severity of injury exists. The limitation period does not begin to run until it is reasonably discoverable that the injury meets the threshold.

…

[58] As Justice Allen noted in Liu v. Silver, the determination of what a reasonable person would be taken to know about his or her claim, which in the immediate case would have to exceed a seriousness threshold, is fact-driven, to be decided based on the particular circumstances of each case. It is a question of fact whether the plaintiff, assisted by a lawyer, made a reasonably diligent investigation and then if the investigation was reasonably diligent whether the investigation had reached the point where a reasonably prudent lawyer would and should have determined that there was a claim that met the seriousness threshold of the Insurance Act. Yelda v. Vu, supra is an example where the fact-driven analysis led to the conclusion in a motor vehicle accident claim that the plaintiff had ample information and ought to have commenced an action long before she did so with the result that her action was statute-barred.

The threshold for injuries in this context are that the impairments are serious and permanent, which requires a substantial interference with a person’s ability to continue their regular or usual employment, in a continuous manner or lasting indefinitely.

However, waiting beyond the two year mark to initiate a claim is often considered an unnecessary risk, and is typically avoided.

Courts in Ontario have also shifted their approach in applying discoverability for claims for contribution and indemnity in crossclaims or third party claims, if a defendant could not have reasonably known the identity or involvement of the proposed third party.

This appears to have started with Murphy v. Hart, where the Ontario Superior Court of Justice applied discoverability to a leak of an underground oil tank. However, the Defendants in this case had not exercised reasonable diligence from the leak discovered in 2009 in seeking to add claims for contribution and indemnity in 2015, and was not approved.

The Ontario Court of Appeal soon after found in Mega International Commercial Bank (Canada) v. Yung that the general rule for contribution and indemnity under s.
18 of the Limitations Act still did not displace the principle of discoverability in s. 5,

[63] In my view, s. 18 takes on meaning when it is linked to the Limitations Act, 2002, s. 5(2). Subject to the absolute 15-year limitation period in s. 15(2), ss. 5(2) and 18 together establish the presumptive limitation period for contribution and indemnity claims – a presumptive limitation period that incorporates the discoverability principles outlined in ss. 4 and 5(1). I emphasize the interaction between ss. 5(2) and 18 for two reasons.

[64] First, s. 18 is linked expressly to s. 5(2)...